rlhorne5055[at]yahoo.com wrote:

- quote -

A change in job location (of enough miles) is an exception
to the 2 year rule.

- quote -

There are three 2-year tests - ownership, primary residence,
and time since the exclusion was last taken.

It is highly unlikely that the capital gains tax will be 18%
of your proceeds because the federal tax is only 20% of the
gain. Of course your accountant might be talking about cash
in your pocket and calling "proceeds" the net after paying
your mortgage. The amount of the mortgage balance is
irrelevant in computing capital gain or loss.

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rlhorne5055[at]yahoo.com wrote:

- quote -

Your accountant is probably at least partially wrong,
although there might be facts not in your post that could
make her/his position correct.

Section 121 provides taxpayers an exclusion of the amount of
gain from the sale of a principal residence of up to $250k,
provided that the taxpayer has not sold another principal
residence within the previous two years. Where a taxpayer
has sold another principal residence within the previous two
years, however, a partial exclusion may be available where
the second sale occurs on account of a change in your place
of employment. The amount of the partial exclusion will be
a percentage of the full amount of $250,000 based on (in
general, for your circumstances) the number of days since
the last sale occurred.

For this purpose, there is a safe harbor under which a sale
is deemed to have been on account of a change of employment
if (a) the circumstances giving rise to the need for the
sale arose during the period you both owned the house and
used it as your principal residence and (b) the new location
of employment is at least 50 miles farther from your current
home than the old location of employment was (e.g., if you
currently have a 30 mile commute, and you would have a
commute of at least 81 miles to the new location if you
stayed in your old house, then you meet this requirement).

In your case, you are selling the house because of a change
in your place of employment (i.e., same employer but at a
different geographic location); thus, if the opportunity to
take the new position ocurred during the time you both owned
and lived in your current house, and the new employment
location would, if you stayed, result in a commute that is
at least 50 miles longer than your current commute, then you
should most likely qualify for the partial exclusion. Since
you've used the current house as your principal residence
for more than 2 years, the amount of the available partial
exclusion is likely to be $250,000 multiplied by the number
of days since the first sale, and divided by 730 (i.e., the
number of days in 2 years). For example, if you sold the
other house 365 days before you sell this house, you would
most likely qualify for a partial exclusion in the amount of
$250,000 * (365/730) = $125,000. Any gain in excess of that
amount would be included as capital gain. Provided the
second house was held for more than 1 year, any such excess
gain should be long-term capital gain.

For more information, see IRS Publication 523 (available on
the IRS website at http://www.irs.gov). I would suggest,
first off, that you get a copy of the publication and take
it to your accountant to see if that changes her/his
opinion. If your accountant didn't know about the
possibility of a partial exclusion (i.e., learning about Pub
523 changes her/his mind), then I would suggest that you
also consider finding a new accountant.

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<rlhorne5055[at]yahoo.com> wrote:

- quote -

No, it isn't.

You'll pay capital gains tax on the _profits_ (if any).

- quote -

Then you can (if you wait long enough) not pay capital gains
taxes on the first $250,000 of profits ($500,000 if you're
MFJ).

Seth

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

<rlhorne5055[at]yahoo.com> wrote:

- quote -

On the surface it sounds like you would qualify for a
reduced exclusion even though you're selling before 2 years
after your prior sale. See Publication 523.

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Due to marital problems, I left my principal residence to
resolve some differences with my spouse. I entered into a
lease option agreement with some people interested in
purchasing my home. My marriage ended so I bought another
house. The people flaked out on the lease option, so I sold
the house about a year ago. I have an opportunity to take a
job with my company out of the area, but have been told I
can't sell my current residence until two years have gone by
since the last sale. Am I just stuck, or what? My accountant
says I will be penalized about 18% on the proceeds to
capital gains. Can that be true? I have lived in my current
residence for over two years.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >